Chelan County PUD commissioners, Tuesday reviewed business plans for the utility’s 2017 operations and financial forecasts for the next five years and beyond. This broad overview, based on commissioner input, will be used as starting points for developing the 2017 budget and business plans.
While the PUD is still on track to achieve its financial objectives, there have been changes in the overall net revenue picture since the Strategic Plan was approved 18 months ago. The biggest change is due to declining wholesale energy market impact on District revenues. Most of this impact occurs beyond five years into the future due to the District’s power marketing hedging program that reduces revenue volatility. Newly planned investments due to the strategic plan and costs to repair unplanned outages have caused costs to modestly rise from when the Strategic Plan was adopted. Still, the PUD projects positive net revenues for each of the next five years.
To respond to the declining net revenue, the PUD is considering setting priorities within its three highest priorities. Reinvesting in assets and people would be the highest priority, followed by debt reduction, followed by the Public Power Benefit program. The PUD still expects to achieve its goal of being below 35 percent debt/equity ratio by 2019 and is considering maintaining, but not growing, the Public Power Benefit program. Commissioners heard that a return to borrowing for capital projects is “in the headlights” - by approximately 2022 – consistent with the board’s direction on a long-term debt philosophy that focused on managing liquidity to keep rates low and stable.
Each of the PUD’s operating units presented summaries of five-year operating plans, starting in 2017. The plans are updated each year for:
- Generation and Transmission
- Fiber and Telecom
- Human Resources and Safety
- Finance, Risk Management & Information Technology
- Information Technology
- Legal and Compliance
- District Services
- Customer Utilities
- Energy Resources
Commissioners will offer feedback on the operating plans through September. The comments will be used to finalize the business plans and then write the 2017 budget. The first discussion of next year’s budget is set for the Oct. 3 board meeting.
In other business Monday, commissioners:
- Reviewed work done with the community and the customer focus groups over the past year to find locations for a new substation to serve Leavenworth and the north shore of Lake Chelan. Existing substations in both areas are near 80-percent capacity. New power stations are needed to meet future growth and provide reliable service, said Chad Rissman, Distribution asset director. Commissioners directed staff to move ahead with analysis of the three possible sites identified by the community for a new substation to serve Leavenworth. A consultant will do detailed cost analysis for each site and create renderings with details on what a substation would look like including distribution lines. Results of the analysis will be discussed at a community meeting on Nov. 2. Leavenworth City Administrator Joel Walinski thanked the community focus group and PUD staff for the work done so far. Only two sites were identified between Chelan and Manson, and one was just withdrawn by the property owner from consideration. Several neighbors repeated objections to the withdrawn site. Rissman said it is important to evaluate more than one site to reach a good decision. General Manager Steve Wright said the open process worked as intended as community discussion brought up issues that led to the one site being withdrawn from consideration, and he urged those community members present to stay engaged with the District to find additional, acceptable sites to evaluate. Several of those present committed to staying involved with the PUD. Commissioners noted the time for finding options for a substation on the north shore of Lake Chelan is now. Construction is planned to start in 2019 and takes two years. Board members directed staff to bring them a revised timeline for reaching a decision, alternate locations to evaluate and the costs involved and the impacts on the system if the process needs to be extended beyond Jan. 1, 2017.
- Reviewed a new policy to protect customer information and privacy. Staff will seek board action of the policy at the Oct. 3 meeting.
- Heard a proposal for changing wholesale fiber rates that while not increasing revenues now would better position the PUD to meet increasing demands for service Mike Coleman, Fiber and Telecom managing director, and consultant Doug Dawson said the move will simplify rates by charging service providers based on broadband use; offer an incentive for service providers to reach more homes and businesses by allowing them to create more affordable packages; and provide revenue to the PUD as needed to invest in the network as broadband demand increases. Commissioners will be asked to act on the move from service-based to “loop” rates this fall.
- Applauded communication and outreach efforts that resulted in five first-place awards for excellence in regional competition sponsored by the Northwest Public Power Association. In categories based on the number of customers, Chelan PUD earned top honors for the strategic planning Owners Guide; the “Saving Energy is a Slam Dunk” advertising campaign; its ¡Discover Us! open house for job seekers in the Hispanic community, its employee video, “I Can Stop The Work,” and its social media outreach during the 2015 Chelan Complex fires. Three of the five awards received perfect scores.
- Sept. 15 – Broadband Fiber for Business, GWATA workshop, 11:30 a.m., Confluence Technology Center
- Oct. 2-8 – Public Power Week
- Oct. 3 – Board meeting, 10 a.m.
- Oct. 3 – Electric Vehicle Charging Station “unveiling” – 4 p.m., PUD Headquarters south parking lot
- Oct. 4 – GPON conversion celebration – 4 p.m., Leavenworth PUD office
- Oct. 5 – Chelan PUD staff visit Cashmere to talk programs 10 a.m. – Noon
- Oct. 6 – Chelan PUD staff visit Entiat to talk programs 10 a.m. – Noon
- Oct. 7 – Doughnuts and Cider in all PUD office lobbies for customers
- Oct. 8 – Public Power Week celebration, 10 a.m.- 1 p.m. , Pybus Market
- Oct. 11 – GWATA Electrification in Transportation panel, 11:30 a.m., Wenatchee Center
- Oct. 22 and 29 – Lake Chelan Powerhouse tours, 9 a.m.-3 p.m.
- Oct. 30 – Fall Roundup, 1-4 p.m., Rocky Reach Visitor Center